Industry body seeks urgent policy support on ethanol pricing, flex-fuel vehicles and post-E20 roadmap to strengthen India’s biofuel ecosystem
The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) has reiterated its commitment to positioning biofuels—especially ethanol—as a central pillar of India’s energy transition, while addressing near-term economic stress in the sugar sector. The assurance came during ISMA’s Annual General Meeting (AGM) held on Thursday, which brought together industry leaders and senior policymakers.
The AGM was attended by Shri Pralhad Joshi, Union Minister for Consumer Affairs, Food & Public Distribution and New & Renewable Energy, and Shri Sanjeev Chopra, Secretary, Department of Food & Public Distribution, underscoring the growing strategic importance of sugar-linked biofuels in India’s clean energy roadmap.
Biofuels at the heart of energy transition
Addressing members, ISMA emphasised that ethanol and other biofuels have evolved from being by-products of sugar manufacturing into critical instruments for energy security, rural income enhancement and emissions reduction. The association stressed the need for continuous engagement with policymakers to ensure that India’s rapidly expanding biofuel ecosystem remains economically viable and investment-friendly.
Ethanol ecosystem needs urgent policy recalibration
A key priority outlined at the AGM was the strengthening of the ethanol value chain. ISMA flagged that ethanol procurement prices have remained unchanged for the past three years, despite rising input and operational costs. The association called for an upward revision of ethanol prices for the 2025–26 Ethanol Supply Year to sustain capacity expansion and protect investments, particularly by private sector sugarcane-based ethanol producers.
ISMA also highlighted ethanol’s growing role in reducing fossil fuel imports and lowering vehicular emissions, positioning it as a cornerstone of India’s Net Zero ambitions.
Driving demand through flex-fuel vehicles
To ensure long-term ethanol offtake, ISMA renewed its call for policy incentives to accelerate the adoption of flex-fuel and strong hybrid vehicles. The association advocated for reduced GST and fiscal incentives for flex-fuel vehicles (FFVs) and hybrid electric vehicles (HEVs), describing them as the most scalable solution to fully utilise India’s existing ethanol production capacity.
Beyond E20: Expanding the biofuel horizon
While India advances towards E20 blending, ISMA urged the government to outline a clear, phased roadmap beyond E20 to provide long-term visibility to investors. The association also pointed to emerging opportunities such as diesel blending with Iso-Butanol, which could significantly broaden the country’s biofuels landscape and deepen decarbonisation across transport segments.
Sugar sector viability and farmer payments
Alongside biofuel advocacy, ISMA raised concerns over declining sugar prices, which are currently below production costs. The association sought a timely upward revision of the Minimum Selling Price (MSP) to ensure the financial stability of sugar mills, enable timely payments to farmers and prevent the build-up of cane arrears.
Stable production outlook for 2025–26
ISMA reaffirmed its first advance estimate of gross sugar production at 343.5 lakh tonnes for the 2025–26 season. The estimate is based on pan-India satellite imagery and field assessments, supported by updated data from Maharashtra and Karnataka showing a 28% year-on-year increase in crushing by mid-December 2025 due to improved cane yields and recovery rates.
Industry voices
Gautam Goel, President, ISMA, said the sector stands at a critical inflection point. “While addressing immediate economic challenges is essential, our larger focus is on building a future-ready sugar and bio-energy industry anchored in sustainability, technology and diversification,” he said.
Vice President Niraj Shirgaokar described ethanol as central to India’s clean energy journey. “Policy clarity beyond E20 and timely revision of ethanol prices will be decisive in sustaining investments and maintaining momentum in the biofuels ecosystem,” he noted.
Director General Deepak Ballani said ISMA’s roadmap includes advanced cane development, digitalised mills and diversification into bio-based products. “These efforts align with Atmanirbhar Bharat and Viksit Bharat, while positioning India’s bio-energy model as a scalable blueprint for the Global South,” he added.
With biofuels gaining strategic prominence, ISMA’s AGM underscored the sector’s transition from traditional sugar manufacturing to a diversified, energy-focused industry aligned with India’s long-term climate and energy security goals.